GIFT   OF 


AUG  17  I 


REASONS  AND  REMEDIES  FOR  OUR 
BUSINESS  TROUBLES 


AN  ADDRESS 

DELIVERED  BEFORE  THE  COMMERCIAL   CLUB  AND  THE 

PITTSBURGH  INDUSTRIAL  DEVELOPMENT  COMMISSION 

AT  PITTSBURGH,  MAY  22ND,  1914 


By 
SAMUEL  UNTERMYER 

of  New  York 


REASONS  AND   REMEDIES   FOR   OUR   BUSINESS 

TROUBLES 


It  is  useless  to  blink  the  fact  that  we  are  in  serious  trouble. 
At  the  end  of  a  long  series  of  years  of  bountiful  crops  and 
with  a  record-breaking  harvest  for  the  present  year  assured, 
when  optimism  should  be  rampant,  we  are  confronted  every- 
where by  business  contraction  and  depression.  The  New  York 
banks  are  overflowing,  call  money  on  Stock  Exchange  collateral 
is  a  drug  in  the  market,  as  is  always  the  case  when  business  is 
languishing,  and  yet  it  is  impossible  to  secure  loans  on  improved 
unencumbered  real  estate  or  investment  funds  for  new  enter- 
prises on  any  terms.  Capital  is  everywhere  hoarding  its  re- 
sources for  some  emergency  and  the  small  investor  seems  to  have 
disappeared. 

Why?  Until  we  have  diagnosed  the  disease  it  would  be 
dangerous  to  attempt  to  apply  the  remedy.  There  are  doubt- 
less contributing  world-causes  but  they  are  so  remote  as  to 
be  almost  negligible.  There  are  such  things  as  world  cycles 
of  business  and  financial  depression  due  to  destructive  wars, 
widespread  famine,  panics  brought  about  by  over-straining  the 
world's  capital  resources  and  by  over-speculation — but  no  such 
conditions  confront  us  at  the  moment. 

True,  the  Balkan  War  and  the  demands  upon  European  cen- 
tres for  funds  with  which  to  refinance  the  Balkan  States  are 
and  will  for  some  time  continue  to  be  a  severe  drain  and  will 
divert  European  capital  from  us,  as  do  the  attractions  of  the 
vast  new  enterprises  in  Russia,  South  America  and  the  Far 
East. 

But  we  have  accumulated  wealth  so  rapidly  that  we  are 
year  by  year  less  dependent  on  the  investment  of  new  foreign 
capital  in  our  country,  although  it  is  still  very  important  to 
us  that  existing1  investments  shall  not  be  withdrawn  as  they 
have  been  recently, 


Our  troubles  do  not  however  lie  primarily  in  that  direc- 
tion. 

Xor  is  the  Tariff  Bill  to  any  appreciable  extent  responsible 
for  our  plight.  A  downward  revision  was  demanded  by  the 
people  and  recognized  as  necessary  by  all  parties.  The  change 
lias  been  from  an  average  of  about  43%  to  an  average  of 
about  20%  and  has  been  on  the  whole  wisely  distributed.  It 
is  the  first  Tariff  Bill  enacted  in  our  history  that  was  unselfish 
and  uninfluenced  by  the  demands  of  special  interests,  which 
have  heretofore  dictated  this  class  of  legislation.  If  with  that 
percentage  of  protection  we  are  unable  to  meet  foreign  com- 
petition in  our  own  country  and  stimulate  our  export  busi 
ness,  we  may  as  w^ell  count  ourselves  "out  of  the  game"  in  the 
world's  markets. 

The  statistics  for  the  first  eight  months  of  the  operation  of 
the  new  law  show  far  less  disturbance  in  the  currents  of  tradt 
than  was  fairly  to  be  expected.  We  have  been  a  shiftless, 
prodigal  and  unscientific  people  in  our  methods  of  manufactur 
ing  and  marketing  our  goods.  The  undue  shelter  of  the  Tarifi 
and  the  elimination  of  home  competition  through  the  Trusts 
and  trade  agreements  have  weakened  our  business  virility,  en 
couraged  extravagance,  substituted  bureaucracy  for  individ 
uality  in  our  Trust-controlled  industries  and  have  thereby 
crippled  our  competitive  power.  With  our  superior  labor  and 
vast  natural  resources  we  should  be  leading  the  world  as  an 
export  manufacturing  nation  instead  of  which  we  are  in  im- 
minent peril  of  ceasing  to  be  a  factor. 

If,  as  I  believe,  time  shall  demonstrate  that  with  the  return 
to  individuality  in  business  and  the  practice  of  skill  and  econ 
omy  and  with  the  resourcefulness  that  are  ours  we  are  able  to 
meet  foreign  competition  with  the  aid  of  the  generous  pro- 
tection we  now  enjoy,  the  struggle  will  have  been  wholesome 
and  stimulating.  There  is  no  basis  for  charging  our  present 
conditions  to  the  Tariff. 

What  then  are  the  reasons  assigned  and  where  lies  the 
truth? 

First  and  foremost,  it  is  insisted  in  certain  influential  quar- 
ters that  the  policies  of  the  Administration  are  responsible. 
Its  economic  program  is  simple — to  destroy  the  Trusts  and 
curb  existing  corporate  abuses — -which  is  said  to  be  unsettling 
business.  Our  newspapers  are  feeling  the  effect  of  business 


contraction  and  financial  stagnation  in  their  advertising  col- 
umns. In  casting  about  for  an  explanation  they  have  adopted 
the  views  of  the  supposed  financial  experts,  -whose  interest. 
it  is  to  divert  blame  from  themselves,  especially  when  it  offers 
them  the  opportunity  at  the  same  time  to  fasten  it  upon  an 
Administration  that  is  pledged  to  correct  their  excesses.  And 
so  we  have  the  great  power  of  the  press  honestly,  but  I  think 
mistakenly,  generally  supporting  the  cry  that  the  demoraliza- 
tion is  due  to  impending  legislation. 

If  this  is  an  erroneous  view  it  is  doing  incalculable  harm. 
Like  every  treatment  based  upon  a  false  diagnosis,  the  real 
disease  continues  to  develop  and  progress  through  neglect, 
whilst  the  healthy  organs  are  weakened  by  the  irritation  result- 
ing from  mistaken  treatment. 

It  is  therefore  of  the  highest  importance  that  w^e  get  at  the 
actual  facts.  Our  National  prosperity  is  involved  in  reaching 
the  right  answer.  Party  spirit  and  party  advantage  should 
play  n©  part  in  such  an  inquiry.  In  the  interest  of  the  coun- 
try as  well  as  for  our  own  sakes  let  us  be  absolutely  fair  in 
seeking  the  solution.  Nothing  is  to  be  gained  and  much  will 
be  lost  if  we  are  diverted  to  false  leads. 

I  am  aa  ardent  admirer  of  our  Chief  Magistrate,  but  not  a 
blind  worshipper  or  follower  of  his  or  any  other  man's  policies. 
Like  all  of  us  his  judgment  is  fallible,  but  he  has  shown  him- 
self exceptionally  responsive  to  the  public  will  and  has  made 
surprisingly  few  if  any  mistakes  in  dealing  with  the  stupendous 
problems  that  have  been  thrust  upon  hirn  and  in  carrying  out 
the  program  that  he  was  commissioned  to  execute. 

In  fourteen  months  of  power  the  party  has  been  confronted 
with  more  grave  and  sudden  International  and  National  emer- 
gencies than  have  come  to  previous  Administrations  in  as 
many  years.  The  President  has  met  the  situations  as  they 
arose  with  candor,  courage  and  splendid  judgment  and  has 
grown  day  by  day  in  the  confidence  and  affections  of  the  coun- 
i  i  y.  I  believe  in  his  high  ideals  of  public  duty  and  in  his 
Intense  patriotism ;  but  he  has  no  monopoly  of  those  virtues. 
They  hare  characterized  every  President  in  the  history  of  our 
Nation.  That  is  our  proud  boast  and  the  fact  that  it  is  true 
is  the  best  proof  of  the  success  of  Kepublican  institutions. 

Let  us  briefly  analyze  what  the  Administration  has  thus  far 
done  and  what  it  is  proposing  so  that  we  may  determine 


whether  there  is  any  basis  for  the  charge  that  it  is  to  any  extent 
accountable  for  the  present  distressing  business  unrest  and 
uncertainty. 

Its  critics  claim  that  our  Mexican  policy  has  been  wavering 
and  provocative  of  war ;  that  we  should  either  have  recognized 
Huerta  at  the  outset  and  thus  assisted  him  to  restore  order  in 
his  country  or  have  intervened  in  short  order  to  that  end  with 
the  prospect  of  a  long  and  bloody  conflict  that  would  have 
confirmed  and  concentrated  upon  us  the  suspicion  and  hatred 
of  our  South  American  neighbors  whose  confidence  and  friend- 
ship we  are  anxious  to  secure. 

When  the  history  of  the  events  that  preceded  the  present 
Administration  is  written  and  the  story  of  wholesale  assassi- 
nation, treachery  and  chicanery  by  which  Huerta  secured  and 
maintained  power,  and  his  savage  disregard  of  the  decencies 
necessary  to  diplomatic  intercourse  in  his  dealings  not  only 
with  us  but  with  the  representatives  of  all  the  Powers  is  told, 
it  will  be  seen  that  quite  apart  from  the  fact  that  we  were 
asked  to  encourage  on  our  borders  a  Government  founded  on 
assassination  it  would  have  been  for  many  other  reasons  im- 
possible to  have  diplomatic  relation  with  that  sort  of  Dicta- 
torship. 

Posterity  will  in  my  judgment  give  high  praise  for  the  splen- 
did evidence  furnished  by  this  incident  of  the  depth  of  sincerity 
of  our  desire  for  world  peace,  as  evidenced  by  our  rare  patience 
and  self-abnegation.  We  have  at  last  made  our  neighbors  re- 
alize that  we  shall  never  wage  a  war  of  conquest.  The  lesson 
we  have  taught  by  our  attitude  under  intolerable  provocation 
that  a  giant  nation  need  not  use  its  strength  as  a  giant  is  well 
worth  the  price.  We  are  about  to  witness  the  triumph  of  a 
new  diplomacy  on  this  Continent  that  will  render  war  hereafter 
well-nigh  impossible  and  will  advance  the  cause  of  humanity 
by  centuries.  No  greater  service  was  ever  performed.  Our 
Xation  will  head  the  roll  of  honor  in  the  cause  of  universal 
peace. 

The  situation  was  in  any  event  unavoidable.  It  was  a  legacy 
to  the  present  Administration  from  its  predecessor.  There  is 
nothing  in  it  to  account  for  the  troubles  Ave  are  IIOAV  discussing. 
They  were  with  us  before  the  Mexican  crisis  arose  and  have 
not  been  altered  by  it.  War  should  stimulate  rather  than  de- 
press business,  temporarily  at  least.  So  we  may  dismiss  that 
consideration  and  take  up  in  order  the  domestic  causes  that 


5 

are  assigned;  all  of  which  are  based  on  the  past  accomplish- 
ments and  present  proposals  of  the  Administration  by  way  of 
legislation. 

Apart  from  the  Tariff  Bill  and  yet  a  part  of  it,  there  has 
been  enacted  the  Income  Tax  Law.  Surely  none  will  deny  the 
wisdom  of  that  legislation .  or  contend  that  it  has  tended  to 
impair  confidence  or  unsettle  business.  It  was  a  cruelly  long- 
delayed  act  of  justice  to  the  toiling  masses  upon  ivhom  all  the 
burdens  of  government  had  been  laid.  Let  us  hope  that  the 
]>  resent  law  is  only  an  entering  w^edge.  I  believe  the  time  is 
not  far  distant  when  the  revenues  of  the  Government  from  that 
source  will  develop  our  vast  natural  resources,  convert  our 
deserts  into  rich  agricultural  gardens,  widen  and  deepen  our 
rivers  and  harbors,  maintain  an  army  and  navy  that  will  make 
for  universal  peace,  furnish  prosperous  employment  for  hun- 
dreds of  thousands  of  our  people  and  inaugurate,  with  the  co- 
operation of  employers  of  labor,  a  vast  system  of  social  reforms 
that  shall  include  old-age  pensions  and  insurance  against  sick- 
ness and  unemployment.  The  enactment  of  this  program  will 
be  the  answer  of  Capitalism  to  the  impracticable  theories  of 
Socialism. 

The  passage  of  the  Currency  LaAV  is  the  other  momentous 
accomplishment  of  the  Administration  within  its  brief  life. 
^Nothing  more  distinctively  constructive  and  reassuring  to  busi 
ness  and  nothing  more  necessary  to  its  safety,  stability  and 
independence  has  ever  been  accomplished.  Its  detractors  have 
been  forced  to  recognize  its  value  and  have  been  converted  into 
unwilling  champions  in  the  face  of  their  dire  prophecies  of 
disaster.  The  rich  harvests  of  the  privileged  few  and  the  suffer- 
ings of  the  many  from  financial  panics  are  things  of  the  past, 
thanks  to  the  courage  and  wisdom  of  this  legislation. 

Yet  it  is  only  a  few  months  since  our  troubles  were  being 
charged  to  the  pendency  of  the  Currency  Bill  and  a  formida- 
ble movement  was  under  way  to  postpone  action  upon  it,  for  the 
same  reason  that  is  now  being  urged  for  delaying  the  settle- 
ment of  the  Trust  Question.  Would  it  have  made  for  the  bet- 
terment of  conditions  if  Currency  legislation  had  been  left 
"hanging  in  the  air"  for  another  year?  The  same  reasoning 
applies  in  favor  of  now  ending  the  agitation  and  uncertainty 
over  the  problem  now  under  consideration. 

There  is  nothing  revolutionary  or  unsettling  in  the  pro- 
posals embodied  in  the  pending  Trust  Bills.  The  only  just  crit- 


6 

icism  is  that  in  their  present  form  they  are  too  largely  made 
up  of  compromises — weak,  superficial,  ineffective  and  innoc- 
uous. They  will  not  as  they  stand  eradicate  the  intolerable 
evils  against  which  they  are  supposed  to  be  directed.  The 
sub- Committee  by  which  they  were  drafted  and  which  has  been 
for  months  faithfully  and  industriously  struggling  with  its 
complicated  problems  has  mistaken  the  boisterous  activity  of 
a  small,  selfish,  powerful  group,  working  their  now  familiar 
publicity  campaign,  for  the  voice  of  the  business  world  and 
has  timidly  surrendered  to  the  outcry.  The  objections  that 
appear  to  come  from  the  business  community  are  genuine  only 
to  the  extent  to  which  they  too  have  been  misled  by  this  cam- 
paign in  which  thy  have  been  cleverly  thrust  forward  as  pawns 
in  the  game  that  the  Big  Interests  are  playing  under  cover 
of  legitimate  business.  The  protesting  resolutions  of  Chambers 
of  Commerce  against  this,  that  and  the  other  feature  of  the 
Bill,  with  which  Congress  is  being  inundated  are  old  acquaint 
ances.  We  now  know  how  they  are  engineered.  They  have 
lost  their  terrors  unless  supported  by  reason.  The  article  they 
furnish  is  now  recognized  as  the  purchasable  commodity  of 
a  new  but  already  well-organized  industry  that  has  been  hap- 
pily christened  by  one  of  its  chief  practitioners  as  the  "accelera 
tion  of  public  opinion." 

Comprehensive  regulative  laws,  covering  this  entire  field 
are  essential  to  the  continued  existence  of  small  business  and 
to  restore  its  independence.  We  are  constantly  being  deluded 
"by  the  cry  that  we  have  too  many  laws  and  that  what  we  need 
is  a  proper  enforcement  of  those  w^e  have.  This  is  not  true 
in  the  field  under  discussion.  Our  corporate  form  of  business 
has  developed  so  rapidly  and  on  such  a  vast  scale  that  the  laAvs 
to  regujate  it  have  not  kept  pace  with  the  growth  and  develop- 
ment of  corporate  government.  The  absence  of  these  restric- 
tions is  largely  responsible  for  the  corporate  corruption  from 
which  we  are  suffering,  the  evidences  of  which  are  gradually 
coming  to  light. 

The  public  has  been  for  years  warned  of  its  existence  and 
of  the  necessity  for  relief  by  those  who  are  familiar  with  the 
facts  and  who  have  had  the  courage  and  public  spirit  to  speak 
out,  but  their  voices  have  been  drowned  by  the  power  of  the 
entrenched  interests  and  they  have  been  rewarded  chiefly  with 
inspired  abuse  and  misrepresentation  of  their  motives.  Nothing 


has  boon  disclosed  within  the  past  year  that  was  not  plainly 
foreshadowed  by  the  testimony  and  report  of  the  Pujo  Com- 
mittee. The  time  has  at  last  come  when  legitimate  business 
and  the  community  that  have  so  long  victimized  are  begin- 
ning to  recognize  the  peril.  Substantially  all  the  pending  legis- 
lation is  outlined  in  the  Recommendations  of  the  Report. 

We  need  laws : 

1.  Prohibiting    all    forms    of    interlocking    control    of    big 
competitive  businesses,  of  which  interlocking  directors  is  but 
one  of  its  many  manifestations,  but  it  is  not  necessary  to  in- 
terfere with  small  business  or  to  bring  it  under  Federal  regu- 
lation. 

2.  Prohibiting  holding  companies  that  are  in  restraint  of 
competition.    Here  again  small  companies  should  be  excluded 
from  the  operation  of  the  Act. 

3.  Regulating  competition  with  a  view  of  preventing  the 
practice  of  unfair  business  methods  by  Big  Business  to  the 
injury  of  small  competitors. 

4.  Prohibiting  the  "dummy"  director  and  all  other  forms 
of  secret  control  so  that  the  responsibility  for  corporate  ac- 
tion shall  be  fixed  upon  those  who  in  fact  dominate  and  guide 
the  corporate  policy  and  benefit  by  its  lawless  acts. 

5.  For  the  protection  and  proper  representation  of  minority 
stockholders. 

G.  Rigidly  regulating  and  supervising  the  issue  of  corporate 
securities  through  the  agency  of  Federal  Commissions  and 
requiring  complete  publicity  of  the  purposes  to  which  the  pro- 
ceeds are  to  be  applied  and  of  the  profits  of  the  bankers,  pro- 
motors  and  intermediaries. 

7.  Abolishing  the   "graft"  of  constituting  private  bankers 
as  the  sole  fiscal  agents  and  depositaries  of  the  funds  of  the 
corporations  whose  policies  they  dictate  and  requiring  that 
their  funds  be  placed  in  banks  where  they  will  be  subject  to 
supervision. 

8.  Placing  the  operations  of  the  Stock  Exchange  under  Fed- 
eral supervision  so  as  to  put  an  end  to  the  long  era  of  shame- 
less manipulation  of  security  prices  through  the  use  of  the 
machinery  of  the  Exchange  and  to  which  dishonest  practice 
many  of  our  vast  fortunes  may  be  traced. 

9.  Releasing  the  grip  of  the  handful  of  men  constituting 
the  "Money  Trust"  over  our  great  interstate  railway  and  indus- 


8 

trial  systems  by  abolishing  voting  trusts,  reforming  our  meth- 
ods of  appointing  Receivers  of  insolvent  corporations  and  by 
placing  Reorganizations  under  the  control  of  the  Courts  and 
of  Federal  Commissions. 

10.  For  a  systematic  and  impartial  enforcement  of  the  Anti- 
Trust  Law,  which  has  never  been  and  is  not  now  being  gener- 
ally enforced. 

11.  Taking  out  of  the  hands  of  the  Attorney-General  and 
furnishing  the  necessary  legal  and  executive  machinery  for  the 
enforcement  of  the  decrees  of  the  Courts  for  the  dissolution 
of  combinations  that  have  been  adjudged  to  be  unlawful  and 
for  actually  disintegrating  and  keeping  segregated  such  cor- 
porations and  thus  ending  the  farce  in  which  our  Attorney- 
Generals  have  been  engaged  and  that  is  bringing  the  admin- 
istration of  justice  into  deserved  contempt. 

12.  Giving  to  every  party  who  is  injured  by  the  existence 
of  an  unlawful  combination  the  independent  remedy  to  enjoin 
the  illegal  acts  or  suing  to  dissolve  the  combination  without 
awaiting  the  slow,  uncertain  and  spasmodic  processes  of  the 
Department  of  Justice.     This  right  should  however  be  safe- 
guarded against  abuse  by  allowing  the  Government  to  assume 
control  of  any  such  action  at  its  pleasure  and  by  preventing  any 
settlement  or  other  disposition  of  the  action  between  the  par- 
ties without  its  consent. 

These  are  the  more  urgent  of  the  many  subjects  that  it  is 
hoped  to  include  in  the  pending  program  when  perfected,  as 
it  should  be  and  as  I  have  every  reason  to  believe  it  will  be. 

It  is  not  so  formidable  a  program  as  would  appear  at  first 
glance,  but  the  entire  field  is  so  highly  technical  and  special- 
ized that  the  opportunities  to  mislead  are  endless.  There  is 
nothing  in  any  feature  of  the  program  that  should  disturb  or 
unsettle  legitimate  business  or  finance;  nothing  that  is  not 
distinctly  wholesome  and  constructive.  Its  enactment  will 
protect  and  reassure  honest  investment  and  should  give  a  new 
impetus  to  independent  enterprise. 

In  order  to  determine  whether  the  pendency  of  this  legisla- 
tion is  in  fact  injuriously  affecting  business,  it  might  be  worth 
while  to  analyze  briefly  the  objections  that  have  been  urged 
against  it.  They  are  directed  mainly  against  the  prohibition 
of  interlocking  directors  and  holding  companies  and  they  come 
apparently  from  many  sections  of  the  country 


9 

The  necessity  for  this  legislation  was  developed  as  the  result 
of  the  investigation  of  the  Pujo  Committee,  from  which  it  was 
demonstrated  that  these  were  the  most  formidable  instrumen- 
talities through  which  the  "Money  Trust"  obtained  its  grip 
upon  the  finances  of  the  country.  Through  the  medium  of 
interlocking  control  many  of  the  great  banks,  railway  systems 
and  industrial  combinations  were  welded  together  into  a  single 
"community-of-interest"  against  which  independent  enterprise 
found  it  impossible  to  contend  and  which  still  remains  undis- 
turbed. We  shall  never  achieve  industrial  independence  or 
peace  until  it  has  been  destroyed,  root  and  branch. 

It  was  through  the  agency  of  the  holding  company  and  the 
supineness  of  the  Department  of  Justice  that  the  organization 
of  the  great  Trusts  became  possible.  The  idea  of  any  cor- 
poration being  controlled  by  another  corporation — a  puppet 
moved  at  the  direction  of  a  power  other  than  of  its  own  gov- 
erning body — is  repugnant  to  all  conceptions  of  justice.  It 
was  not  intended  that  a  corporation  should  ever  be  governed 
by  another  corporation.  That  form  of  management  involves 
on  its  face  a  breach  of  trust  toward  the  outstanding  stock- 
holders, who  are  entitled  to  have  the  benefit  of  the  undivided 
judgment  of  their  managing  trustees  in  the  sole  interest  of 
their  own  corporation  and  without  regard  to  the  interests  of 
any  other  agency.  Under  this  system  of  government  the  man- 
agement of  the  controlled  company  is  necessarily  conducted 
primarily  for  the  benefit  of  the  controlling  or  holding  com- 
pany, which  may  be  and  often  is  opposed  to  the  welfare  of  the 
controlled  company. 

The  claimed  embarrassment  to  business  that  will  result 
from  unlocking  these  interlocking  interests  is  more  fancied 
than  real,  provided  the  operation  of  the  law  is  confined,  as 
it  should  be,  to  the  larger  corporations.  A  reduction  in  the 
number  of  Directors  will  answer  the  important  purpose  of 
concentrating  responsibility.  The  large  corporations  are  man- 
aged mainly  by  their  Executive  Committees.  The  Boards,  con- 
sisting of  from  20  to  40  Directors,  are  unwieldy  and  a  dis- 
tinct impediment  to  effective  administration.  They  are  mere 
registering  machines  for  the  Executive  Committee.  Thoir 
names  are  advertised  to  the  public  as  a  guaranty  of  manage- 
ment, which  is  in  fact  misleading  and  intended  so  to  be.  In 
financial  institutions  they  are  meant  to  attract  business  with- 
out attending  to  it.  With  the  reduction  of  Boards  to  a  work- 


10 

able  body  the  interest  and  activities  of  each,  man  will  be  cen- 
tered in  his  own  institution  and  we  shall  have  a  consequent 
resumption  of  competition. 

The  disintegration  of  the  holding  company  can  be  accom- 
plished with  still  less  friction  or  disturbance,  by  merely  dis- 
tributing the  shares  so  held  among  the  shareholders  of  the 
holding  company.  The  only  "disturbance"  to  business  that 
would  thus  be  involved  would  be  to  restore  the  competition 
that  has  been  thus  restrained.  If  the  stock-holdings  involve 
no  restraint  of  competitive  conditions  the  pending  Senate  Bill 
offers  complete  relief  through  application  to  the  Trade  Com- 
mission, or  in  the  case  of  common  carriers  to  the  Interstate 
Commerce  Commission,  which  has  power  to  permit  holdings 
of  that  character. 

I  agree  however  and  have  earnestly  urged  that  these  pro- 
hibitions against  interlocking  directors  and  holding  companies 
should  be  limited  to  cases  in  which  the  interlocking  of  directors 
or  stockholdings  would  substantially  affect  the  public  interest 
and  that  the  smaller  corporations  be  accordingly  eliminated 
from  the  provisions  of  the  Bill.  There  is  no  reason  for  hamper- 
ing small  business.  None  of  the  perils  sought  to  be  avoided 
lurk  within  its  borders.  The  operations  of  the  small  corpora- 
tions are  not  charged  with  a  public  use  and  do  not  affect  the 
public  welfare  in  the  sense  that  applies  to  the  larger  ones. 

The  suggestion  for  restricting  the  jurisdiction  of  the  Trade 
Commission  in  these  respects  has  been  embodied  in  the  form 
of  proposed  amendments,  limiting  the  Bill  to  interstate  corpor- 
ations having  $1,000,000  capital  or  $2,000,000  of  gross  assets 
or  $3,000,000  of  gross  annual  business.  Such  an  amendment 
will  confine  the  operations  of  the  Bill  to  a  comparatively  few 
cases.  It  will  eliminate  at  least  90%  of  the  corporations  that 
do  an  interstate  business. 

I  cannot  conceive  why  any  business  readjustment,  embarrass- 
ment or  inconvenience  would  be  involved  in  enacting  any  of  the 
other  reforms  that  are  now  under  consideration.  The  dummy 
director  and  the  secret  and  indirect  control  cannot  be  justified. 
No  defense  of  these  practices  has  ever  been  attempted.  No 
one  has  the  right  to  accept  the  benefits  and  attempt  to  escape 
the  responsibilities  of  corporate  management  through  such 
devices. 


11 

Xor  has  th<>re  ever  yet  been  any  justification  attempted  of 
the  failure  to  enforce  minority  representation  in  corporations 
through  cumulative  voting.  Some  of  the  State  (Constitutions 
ef  which  those  of  Missouri  and  Pennsylvania  are  ready  illus- 
trations, make  it  compulsory  to  provide  such  representation, 
as  it  should  be  in  every  State.  If  for  instance  a  Board  of 
Directors  is  composed  of  nine  members,  there  is  no  reason  why 
the  owners  of  ^ach  one-ninth  of  the  stock  should  not  be  repre- 
sented by  one  Director,  which  is  automatically  accomplished 
through  what  is  known  as  cumulative  voting.  The  majority 
would  still  control  but  the  minority  wTould  have  the  privilege 
of  knowing  ^v\hat  is  being  done,  of  protecting  itself  against 
unlawful  acts  and  of  having  its  voice  heard  on  questions  of 
business  policy  in  which  it  is  vitally  interested. 

The  supervision  of  the  issue  of  bonds  and  stocks  of  inter- 
state corporations  by  Federal  authority,  which  is  now  proposed, 
Is  still  another  of  the  Recommendations  of  the  Pujo  Committee. 
It  is  a  tardy  recognition  of  the  right  of  the  public  to  be  pro- 
tected against  exploitation  through  banking  control  or  by  the 
sale  of  worthless  and  inflated  securities,  to  secure  an  accounting 
«f  corporate  expenditures  and  to  prevent  the  use  of  corporate 
funds  in  the  corruption  of  public  officers  and  legislative  bodies. 
If  these  safeguards  had  been  in  existence  in  past  years  we 
should  have  been  saved  the  National  scandals  that  are  being 
from  time  to  time  unearthed  to  the  destruction  of  our  credit 
and  reputation  abroad  and  at  home. 

The  Bill  to  require  the  incorporation  of  Stock  Exchanges 
and  to  place  them  under  Federal  supervision  is  an  essential 
part  of  any  comprehensive  program  for  corporate  reform.  No 
legislation  will  be  thoroughly  constructive  that  omits  to  take 
tb^s  factor  into  account.  Its  overshadowing  importance1  is 
unfortunately  little  understood  by  Congress.  The  manipula- 
tion of  securities  through  the  machinery  of  the  Exchange  and 
their  wide  distribution  under  cover  of  such  manipulation  has 
Veen  the  most  prolific  incentive  for  the  organization  of  Trusts. 
It  has  cost  the  public  more  hundreds  of  millions  than  they  have 
suffered  through  any  other  of  the  many  devices  through  which 
•fliey  have  been  plundered. 

The  remaining  provisions  that  are  intended  to  secure  the 
general  and  impartial  enforcement  of  the  Anti-Trust  Act,  the 
effective  execution  of  the  judgments  of  the  Court  and  the  rem- 


12 

edies  to  individuals  who  are  injured  by  violations  of  law,  can 
hardly  be  claimed  as  disturbing  elements.  If  the  Act  as  orig- 
inally framed  had  secured  to  individuals  aggrieved  by  its  vio- 
lation— as  it  should  have  done — the  right  to  prevent  the  organ- 
ization of  unlawful  combinations  or  to  enjoin  their  operations, 
the  country  would  have  escaped  this  vexatious  problem.  Few  if 
any  of  the  Trusts  would  have  been  permitted  to  come  into  ex- 
istence. Threatened  private  interests  would  have  realized  then 
peril  and  would  have  been  alert  to  protect  themselves.  The 
Government  stood  idly  by  and  by  its  silence  lent  consent  and 
encouragement.  The  sole  remedy  allowed  by  the  Seventh  Sec- 
tion of  the  Anti-Trust  Act  to  private  interests,  to  recover  treble 
damages  for  such  injury,  has  proven  inadequate,  as  might  have 
been  expected.  The  burden  of  conducting  such  litigation  is  in 
itself  prohibitive  and  the  necessity  of  proving  the  damages 
under  our  rules  of  evidence  requiring  that  it  must  be  the  prox- 
imate cause  of  the  injury,  renders  relief  impossible. 

The  only  reason  that  has  ever  been  assigned  for  not  permit- 
ting an  aggrieved  party  to  sue  in  equity  to  enjoin  or  dissolve  the 
combination,  that  it  would  give  rise  to  blackmailing  suits,  has 
never  seemed  to  me  a  sufficient  answer.  Anybody  can  be  sued 
without  cause  and  must  defend  himself.  Corporations  as  well 
as  individuals  are  now  subject  to  suit  on  every  other  conceivable 
ground.  Why  should  the  Courts  have  been  so  solicitous  to  pro- 
tect them  against  attack  on  this  particular  ground  in  which  the 
public  is  so  vitally  interested  when  it  is  notorious  that  the  De- 
partment of  Justice  has  never  attempted  to  enforce  the  law 
except  in  a  comparatively  few  spasmodic  cases  of  conspicuous 
corporations  out  of  the  thousands  of  known  open  violations? 
It  would  be  physically  impossible  for  the  Department  to  enter 
upon  any  general  enforcement  of  the  law  even  if  it  were  dis- 
posed to  do  so  and  it  has  never  shown  any  such  disposition. 

It  must  have  been  manifest  from  the  beginning  that  if  the 
enforcement  of  the  law  was  really  desired  the  only  way  to  se- 
cure it  would  be  to  permit  it  to  be  done  by  private  individuals 
who  are  affected  by  its  violation. 

The  proposed  amendment  meets  the  objection  that  has  been 
made,  in  that  H  requires  any  individual  who  sues  in  equity,  to 
join  the  Government  as  a  party  so  that  the  suit  cannot  be  dis- 
continued pr  dismissed  by  agreement  between  the  parties  with? 


13 

out  the  consent  of  the  Govern  incut.  The  latter  is  given  the 
right  also  to  assume  the  prosecution  of  the  case  at  any  stage 
of  the  proceedings,  or  to  withdraw  from  the  suit  and  is  not  to  be 
bound  by  the  judgment  unless  it  assumes  the  prosecution  and 
continues  in  it  to  the  end. 

Is  there  anything  in  these  provisions  that  should  be  distn rh- 
ino- to  business?  Or  in  the  further  requirement  that  the  new 
Trade  Commission  shall  be  consulted  and  its  approval  obtained 
in  determining  the  manner  of  dissolving  unlawful  combinations 
and  the  form  of  the  decree  and  that  it  shall  see  to  the  proper 
execution  of  that  decree?  These  requirements  will  doubtless 
be  very  disturbing  to  certain  classes  of  business,  especially  to 
the  Trusts  that  have  been  declared  unlawful,  have  been  decreed 
to  be  dissolved  and  that  are  still  nourishing  as  though  nothing 
had  happened.  It  may  also  prove  somewhat  disconcerting  to 
the  public  officials  who  have  frittered  away  th'e  practical  results 
of  hard-earned  Government  victories  through  meaningless  de- 
crees of  dissolution.  It  is  high  time  that  we  did  away  with  these 
performances.  I  venture  to  predict  that  if  this  amendment  is 
passed  the  Trade  Commission  will  find  a  way  of  securing  an 
actual  dissolution  of  the  Standard  Oil  Company  and  of  numer- 
ous other  violations  that  have  been  dissolved  in  form  but  not 
in  fact. 

If,  then,  it  be  true  that  the  pending  legislation  involves  no 
disturbance  of  legitimate  business,  we  return  to  the  inquiry 
as  to  the  reason  for  the  existing  unsettlement  and  depression. 

There  has  never  been  any  doubt  in  any  mind  as  to  the  true 
reason. 

It  is  due  to  the  lawlessness  and  corruption  in  the  manage- 
ment of  our  great  corporations  and  to  the  destruction  of  the 
confidence  of  our  home  and  foreign  investors  following  the  ex- 
posures of  a  few  of  the  many  instances  that  have  characterized 
the  conduct  of  our  corporate  affairs  in  the  past.  There  is  noth- 
ing exceptional  or  that  should  be  considered  surprising  about 
the  disclosures  with  respect  to  the  management  of  the  New 
Haven  road  that  have  recently  been  engaging  public  attention. 
In  this  particular  instance  the  investigation  thus  far  has  barely 
scratched  the  surface.  It  relates  mainly  to  a  single  phase  of 
the  New  Haven  road  and  involves  the  diversion  of  only  about 
$11,000,000  out  of  a  total  of  over  $200,000,000  that  will  have  to 


14 

be  accounted  for  some  day,  provided  the  comatose  shareholders 
will  ever  awaken  and  have  the  sense  or  can  summon  the  courage 
to  assert  their  rights.  If  the  investigation  of  the  Interstate 
Commerce  Commission  is  extended  into  the  other  transactions 
so  as  to  include  the  vast  purchases  of  comparatively  worthless 
competing  properties  at  fabulous  prices  for  the  purpose  of  de- 
stroying competition,  the  dimensions  of  the  offenses  committed 
against  the  stockholders  of  that  Company  will  be  of  a  character 
to  render  the  exposures  incident  to  the  French  Panama  Canal 
scandal  as  a  moonlight  silhouette  compares  to  a  volcanic  erup- 
tion. 

I  do  not  mean  to  suggest  that  the  bankers  or  the  body  of  dum- 
my directors  have  been  guilty  of  or  actively  privy  to  any  actual 
dishonesty  or  that  they  have  personally  profited  by  the  transac- 
tions in  any  illegitimate  way.  I  do  not  believe  that  they  have. 
But  in  the  final  analysis  the  reckless  waste  of  corporate  funds 
for  unlawful  purposes  has  brought  about  the  same  result  so  far 
as  concerns  the  shareholders. 

I  believe  also  it  will  be  found  that  if  the  affairs  of  a  number 
of  other  equally  or  still  more  prominent  railway  systems  that 
might  be  mentioned  ever  come  under  the  scrutiny  of  an  executive 
or  legislative  investigation  or  of  a  Court  pf  Justice,  we  shall 
find  facts  far  more  startling  than  anything  that  has  been  or 
will  be  exposed  in  the  investigation  of  the  New  Haven  road. 

It  is  however  to  be  hoped  that  the  Government  will  not  em- 
bark upon  any  such  general  crusade.  Our  credit  and  reputa- 
tion have  already  suffered  sufficiently  from  the  mere  suggestion 
of  the  general  corruption  that  lies  underneath  the  surface  of 
past  corporate  management.  These  are  things  of  the  past  that 
should  be  prevented  for  the  future.  The  country  seems  suffi- 
ciently aroused  to  the  realization  of  its  disgrace  to  offset  the 
machinations  of  the  interests  that  wrould  ordinarily  be  able  to 
prevent  reformatory  legislation  and  it  is  not  worth  while  to 
further  disturb  confidence  by  turning  up  any  more  of  the  hor- 
rible facts.  We  know  in  a  general  way  enough  of  the  evils  to 
be  able  to  apply  the  remedy. 

None  of  these  things  could  have  happened  under  proper  Fed- 
eral supervision,  nor  if  we  had  laws  as  in  other  civilized  coun* 
tries  prohibiting  Directors  from  dealing  with  themselves  or 
lining  their  pockets  at  the  expense  of  their  ^shareholders  or 


15 

"rigging"  the  stock  markets  in  their  own  securities  or  gambling 
on  inside  information. 

These  mentors  of  the  business  and  financial  world  sternly 
admonish  us  that  every  attempt  to  expose  or  correct  these  evils 
is  "disturbing"  business.  Until  that  kind  of  business  was  dis- 
turbed and  destroyed  by  exposure  and  by  the  legislation  that 
is  needed  to  punish  it  as  it  deserves,  we  would  not  have  and 
have  no  right  to  expect  the  return  of  public  confidence.  There 
is  one  aspect  in  which  the  shareholders  of  these  corporations  and 
the  public  deserve  just  the  kind  of  treatment  they  have  been 
receiving  at  the  hands  of  the  men  who  dominate  these  corpora- 
tions solely  by  reason  of  the  supineness  of  the  real  owners. 
If  they  know  how  to  protect  their  rights  they  have  never  given 
any  indication  of  it. 

Here  again  the  case  of  the  New  Haven  is  only  one  of  a  hun- 
dred striking  illustrations  of  the  criminal  inertia  of  stockhold- 
ers. When  the  trouble  first  arose  they  sat  aimlessly  by  and  saw 
a  highly  respectable  decoy  "Protective"  Committee  organized 
apparently  in  protection  of  the  management  to  ward  off  real 
investigation. 

What  has  become  of  that  Committee?  If  there  was  any  mem- 
ber upon  it  who  really  represented  the  true  interest  of  the  stock- 
holders why  was  nothing  ever  done  to  uncover  the  recklessness 
of  the  management?  If  they  made  an  examination  of  the  ac- 
counts why  did  they  not  report  the  existing  conditions  to  the 
stockholders?  Why  did  they  permit  the  investing  public  to  go 
011  buying  the  shares  in  ignorance  of  the  facts?  Why  have  the 
stockholders  never  organized  and  elected  their  own  representa- 
tives to  protect  their  rights  and  to  secure  restitution?  What  is 
the  matter  (with  these  people  who  have  had  the  intelligence  and 
frugality  to  amass  these  interests  that  they  lack  the  common 
instinct  of  self-preservation?  They  have  been  told  that  over 
f  G0,000,000  in  unearned  dividends  have  been  paid ;  that  a  huge 
corruption  fund  has  ben  used  to  procure  franchises  for  a  worth- 
less property  and  that  there  has  been  more  corrupt  politics  than 
there  has  been  of  railroading ;  that  a  large  part  of  $200,000,000 
that  has  been  expended  has  been  devoted  to  the  buying  of  com- 
peting properties  at  fabulous  prices  in  violation  of  law  and  that 
almost  every  crime  in  the  calendar  against  Corporate  manage- 
ment has  been  perpetrated  under  the  very  eyes  of  their  Trustees. 


16 

Thousands  of  these  stockholders  acquired  their  interests  in  re- 
cent years  upon  the  faith  of  the  inducement  of  the  dividends  that 
were  being  paid  and  of  the  representations  contained  in  the 
annual  statements  to  the  effect  that  the  earnings  were 
in  excess  of  these  dividends.  What  right  have  these  men 
and  women  who  are  idly  standing  by  with  knowledge  of  these 
facts  to  expect  sympathy  or  consideration?  If  they  have  no 
regard  for  their  own  investments  they  have  at  least  a  public 
duty  to  perform  which  none  of  them  seem  willing  to  under- 
take. 

For  years  past  our  leaders  in  the  financial  world  have  been 
educating  the  public  to  the  belief  that  every  attempt  to  un- 
cover corporate  rottenness  or  enforce  accountability  for 
the  sacred  trusts  reposed  in  the  officers  and  directors  of  these 
corporations  was  a  "strike"  or  an  attempt  at  blackmail.  No 
stone  has  been  left  unturned  to  crush  and  disgrace  the  few 
men  of  courageous  spirit  who  have  tried  to  protect  the  share- 
holders and  the  public.  When  Mr.  Louis  D.  Brandeis  led  the 
assault  upon  the  New  Haven  management  and  tried  to  open 
the  eyes  of  the  stockholders  to  the  situation,  when  he  told 
them  that  they  were  being  deceived,  that  the  dividends  were 
not  being  earned,  he  was  denounced  and  traduced  as  an  enemy 
to  society.  Almost  every  Representative  from  his  State  in 
Congress  and  prominent  men  in  public  life  from  adjoining 
States  banded  together,  largely  through  the  influence  of  the 
New  Haven  road,  to  prevent  him  from  securing  an  entrance 
into  public  life  in  the  position  which  he  would  have  been 
of  inestimable  aid  to  the  Nation  and  which  he  would  have 
graced  and  honored  by  his  acceptance.  It  has  been  notorious 
that  for  decades  the  New  Haven  road  has  practically  owned 
the  Legislature  of  certain  of  the  New  England  States.  It  re- 
garded these  exhibitions  of  its  power  to  punish  enemies  and 
reward  its  friends  with  high  public  office  as  essential  u.r.d  it 
has  never  hesitated  to  give  such  object  lessons  whenever  occa- 
sion presents  itself. 

I  repeat  that  we  are  getting  just  the  kind  of  corporate  man- 
agement we  deserve  and  that  so  long  as  this  spirit  is  permitted 
to  pervade  the  public  mind  we  shall  continue  to  get  that  sort 
of  management  and  none  other. 

And  yet  we  continue  to  permit  ourselves  to  be  beguiled  ns 
to  the  cause  of  our  present  troubles.  Is  it  any  wonder  that 


17 

the  investors  of  other  nations  have  been  throwing  our  securi- 
ties buck  upon  us  at  any  price  they  can  get  for  them,  glad  to 
be  rid  of  us  on  any  terms?  Or  that  we  are  unable  to  sell  any 
more  securities  abroad?  Or  that  our  markets  are  depressed 
and  we  find  difficulty  in  financing  the  requirements  of  the 
maturing  obligations  of  our  public  service  corporations?  Why 
should  the  small  investor  entrust  his  hard-earned  savings  to 
the  men  who  have  mercilessly  exploited  and  betrayed  him 
•whilst  moralizing  in  public  upon  the  importance  of  character 
as  the  essential  to  success,  to  the  chorus  of  a  worshipping  press 
led  by  their  chosen  press  bureaus? 

This  only  begins  to  tell  the  story  of  the  callousness  and 
stupidity  of  our  people.  Not  even  when  their  eyes  have  been 
opened  against  their  wills  and  in  the  face  of  their  resentment 
at  the  exposure  of  the  faithlessness  of  their  chosen  trustees, 
do  they  begin  to  see  or  act.  They  go  on  permitting  and  en- 
couraging these  same  men  to  manage  the  trusts  they  have  be- 
trayed. The  powers  behind  the  throne  that  have  named  the 
presidents  and  trustees  of  the  looted  corporation  proceed  to 
lecting  another  man,  always  of  previous  untarnished  reputa- 
discipline  their  tools  by  removing  the  chief  untarnished  reputa- 
tion, but  always  pliant  to  their  will,  in  his  place,  not  even  taking 
the  trouble  to  change  the  minor  puppets.  At  the  next  election 
of  shareholders  the  proxies  are  gathered  with  the  same  ease 
by  the  same  people  and  the  old  order  of  things  is  continued 
"without  even  a  semblance  of  change,  except  in  the  nominal 
directing  head,  but  subject  to  the  same  mysterious  control. 

We  had  a  like  disheartening  experience  following  the  expo- 
sure of  Life  Insurance  corruption  in  1906.  The  nominal 
heads  were  deposed  but  the  power  behind  the  throne  and  the 
old  disciples  remain.  Yet  none  of  these  men  had  or  has  had 
a  single  dollar  of  actual  investment  in  the  companies. 

As  indicating  the  close  relations  of  the  operations  of  the 
various  departments  of  the  "Money  Trust"  to  one  another,  T 
call  your  attention  in  this  connection  to  a  few  significant  facts. 
Prior  to  the  insurance  upheaval  Mr.  George  F.  Baker  was 
the  Chairman  of  the  Finance  Committee  and  the  dominating 
spirit  in  the  Mutual  Life  Insurance  Company.  He  is  now 
more  firmly  than  ever  in  control.  Mr.  Baker  is  and  has  been 
for  many  years  a  partner  of  Mr.  Morgan  in  all  of  the  great 


OFTHC 

UNIVERSITY 

OF 


18 

enterprises.  They  together  dominate  or  control  the  Equitable 
Life  Assurance  Society,  the  First  National  Bank,  the  National 
Bank  of  Commerce,  the  Bankers  Trust  Company,  the  Guar- 
anty Trust  Company  and  numerous  other  great  financial  in- 
stitutions. When  Mr.  McCurdy  was  forced  to  resign  as  the 
result  of  the  Life  Insurance  exposures  there  was  placed  in 
the  Presidency  of  that  Company  with  $500,000,000  and  more 
of  assets  the  law  partner  of  Mr.  Baker's  uncle  who  was  in- 
cidentally Mr.  Baker's  private  Counsel  and  the  Counsel  for 
his  bank.  The  Mutual  Life  held  35,640  shares  of  New  Haven 
stock.  The  law  passed  in  1906  as  the  result  of  the  scandal  re- 
quired them  to  dispose  of  all  their  stocks  within  five  years, 
which  they  subsequently  had  extended  for  a  further  term  of 
five  years,  to  the  disgrace  of  our  Legislature.  The  New 
Haven  stock,  which  is  now  selling  at  $68  per  share,  could 
readily  hare  been  marketed  during  those  years  at  $200  of 
thereabouts.  The  Company  has  not  parted  with  a  share.  The 
difference  in  price  means  a  loss  of  over  $4,000,000  to  the  pol- 
icyholders  of  the  Mutual  Life  Insurance  Company,  but  this 
large  block  of  stock  is  important  to  Messrs.  Baker  and  Morgan 
in  their  control  of  the  New  Haven  road  and  it  is  steadily  voted 
from  year  to  year  as  they  direct. 

But  I  have  digressed. 

With  a  few  exceptions  the  Presidents  of  these  roads  and 
great  industrial  organizations  and  all  the  Directors  are  named 
by  the  same  authority.  The  shareholders  have  no  real  voice 
in  their  selection. 

The  Interstate  Commerce  Commission  is  doing  the 
right  thing  in  ripping  the  lid  from  this  nest  of  corrup- 
tion to  the  extent  necessary  to  guide  Congress  in  leg- 
islating to  correct  these  evils,  even  though  it  involves  immunity 
to  the  chief  puppet  of  the  men  who  guided  the  destinies  of  the 
Company.  I  am  not  so  sure  that  it  is  necessary  or  advis- 
able to  extend  the  immunity  further  or  that  any  valuable  re- 
sults will  come  from  so  doing,  but  the  inaction  of  the  Depart- 
ment of  Justice  has  been  so  exasperating  and  its  purposes  so 
unfathomable  that  everyone  has  despaired  of  results  in  that 
direction. 

With  such  conditions  surrounding  us  we  ought  not  be  sur- 
prised to  find  these  men  "advising"  us  that  if  we  seek  to  cor- 
rect the  evils  for  which  they  are  responsible  and  which  have 


19 

destroyed  public  confidence  the  Administration  will  be  chas- 
tised by  the  "business"  community  for  which  they  assume  to 
speak.  The  proposition  that  we  continue  to  permit  ourselves 
(o  be  guided  by  them  is  so  staggering  in  its  temerity  that  one 
is  at  a  loss  for  words  to  characterize  it. 

The  remedy  is  simple.  Public  confidence  in  corporate  man- 
agement must  be  restored.  The  existing  legal  machinery 
does  not  assure  responsibility  and  punishment  for  the  mis- 
deeds of  Big  Business.  The  enactment  of  the  pending  Bills 
properly  strengthened  will  help  accomplish  that  result.  Ours 
is  a  rich  country.  Our  wealth  is  fairly  well  distributed,  not- 
withstanding the  many  hundreds  of  millions  that  have  been 
confiscated  by  these  man  in  one  way  or  another  by  way  of 
tribute  or  through  gross  neglect.  A  fraction  of  it  can  still  be 
recovered  by  the  shareholders  if  they  will  stand  together  in 
each  of  these  great  corporations  to  enforce , restitution  and  pro- 
tection for  the  future. 

If  the  lessons  of  the  past  have  taught  them  to  manage  their 
own  affairs  hereafter  it  will  have  been  worth  the  fearful  cost. 
When  they  are  able  to  do  that  as  in  former  years,  when  these 
great  properties  were  built  up  and  operated  by  their  real 
owners,  and  not  until  then,  the  investing  public  here  and  abroad 
will  again  interest  itself  in  our  enterprises.  Meantime  we  can 
do  our  share  toward  reassuring  the  civilized  world  that  we 
are  not  a  Nation  of  freebooters  and  that  we  have  sufficient 
of  the  capacity  for  self-government  left  to  end  the  recklessness 
and  lawlessness  of  High  Finance  so  that  capital  will  hereafter 
T)e  as  safe  with  us  as  in  other  countries. 


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